Jurisdiction(s):
United Kingdom

UK FTT: Barclays Service Corporation lacked UK fixed establishment for VAT group; whole-entity approach unaffected by Danske Bank; HMRC's protection-of-revenue objection would have been unreasonable.

Published on: 12 September 2024

Published by a LexisNexis Tax expert

Legal News

Article summary

Barclays Service Corporation and another v HMRC [2024] UKFTT 785 (TC)

Barclays Service Corporation (BSC) provided services to fellow entities within the Barclays Corporate Group, including those in a UK VAT group. A UK branch of BSC was entered on the Companies House register in July 2017. In December 2017, an application was submitted to HMRC seeking to include BSC in the UK VAT group. Had it succeeded, the UK VAT group would have avoided having to account each year, under the reverse charge, for sums running into many millions of pounds. HMRC refused the application in March 2018 on two grounds:

BSC was ineligible to join the VAT group as it did not have a UK fixed establishment
Even if BSC did have a UK fixed establishment, refusal was required under ‘protection of revenue’ powers

The taxpayer appealed to the FTT, where an additional question was raised for determination: whether the UK’s VAT grouping provisions impose a territorial restriction such that a UK VAT group excludes establishments located outside the UK (the Danske Bank issue)...

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